Press Releases

  • Friday, May 7, 2010
    GENIVAR Income Fund Announces Growth in Revenues and Net Earnings for the First Quarter of 2010

    MONTREAL, May 7 - The GENIVAR Income Fund (the "Fund") announced today its financial and operating results (unaudited) for the first quarter of 2010. These results cover the period from January 1, 2010, to April 3, 2010.

    Highlights
        ----------
    
        - For the first quarter of 2010, revenues grew to $126.0 million from
          $97.4 million in 2009, representing a 29.3% increase compared to the
          first quarter of 2009. Net revenues were $107.8 million, up 27.1% from
          $84.8 million in the first quarter of 2009. Of the total 27.1% increase
          in net revenues, 12.2% came from the acquisitions completed since the
          first quarter of 2009 and two acquisitions completed in this reporting
          period; the remaining 14.9% being achieved through organic growth, of
          which 7.8% was a result of four extra working days in the first quarter
          of 2010 as compared to the same period in 2009.
    
        - EBITDA increased to $18.5 million in the first quarter of 2010 from
          $16.7 million for the same period in 2009. These first quarter results
          were negatively impacted by an exchange loss of $1.3 million as a
          result of the continued strength of the Canadian dollar. Without this
          negative impact, EBITDA would have increased by 18.4% to $19.8 million
          between the first quarter of 2009 and 2010.
    
        - Earnings before non-controlling interest were $11.0 million, or $0.41
          per unit on a diluted basis as compared to $10.4 million or $0.45 per
          unit on a diluted basis for the first quarter of 2009.
    
        - In the first quarter of 2010, the Fund generated adjustable
          distributable cash of $14.0 million or $0.52 per unit, of which
          $10.2 million was distributed to unitholders, representing an adjusted
          payout ratio of 72.6%.
    
        - As at April 3, 2010, the total workforce of the Fund was more than
          4,200, following the addition of approximately 210 employees during the
          quarter through the acquisitions of V.B. Cook Engineering and the
          Thompson Rosemount Group and the remaining 90 employees through organic
          growth.
    
        - Subsequent to the quarter-end, the Fund announced its intention to
          convert to a dividend-paying corporation as of January 1, 2011 and
          proceeded with the acquisition of two Alberta based building firms,
          Beaubien Glover Maskell Engineering North Inc. and Bearden Engineering
          Consultants Ltd., who together add approximately 50 employees to the
          Fund.
    
        - As at April 3, 2010, backlog increased at $377.2 million, representing
          8.3 months of work.

    "We are pleased with these first quarter results that bode well for the rest of 2010," said Pierre Shoiry, President and CEO of the GENIVAR Income Fund. "This was an active quarter for the Fund as we completed the agreements for the conversion of the Fund into a corporate structure for 2011 and maintained our growth objectives by adding approximately 300 people to our team," he added.

    Annual Meeting
        --------------

    The Fund will hold its annual and special meeting of unitholders on May 27, 2010, at 10:00 a.m. (Eastern time) at the McCord Museum (J. Armand Bombardier Hall), at 690 Sherbrooke Street West, Montreal, Quebec.

    Conference call
        ---------------

    The Fund will hold a conference call at 11:00 a.m. (Eastern time) on May 7, 2010, to discuss these results.

    To participate in the conference call:
        Canada and United States, please dial 1-888-231-8191.
        International, please dial 514-807-9895.
        Conference number: 72464803

    A presentation of the 2010 first quarter highlights and results will be available early in the morning the same day at: www.genivar.com in the Investor Relations section, under Presentations and events.

    The replay of the conference call will also be available in the Investor Relations section of the Company's web site in the days following the event.

    About GENIVAR
        -------------

    GENIVAR is a leading Canadian consulting engineering firm providing private and public-sector clients with a comprehensive range of professional services covering all project phases, including planning, design, construction and maintenance. GENIVAR's clients range in size and scope and primarily operate in the building, industrial, power, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of Canada's largest consulting engineering firms in terms of number of employees, with over 4,200 managers, professionals, technicians, technologists and support staff in more than 80 locations in Canada and abroad. www.genivar.com

    RESULTS OF OPERATIONS
    
                                                     ----------------------------
                                                             First quarter
                                                     ----------------------------
                                                              2010         2009
                                                     ----------------------------
                                                           FOR THE      FOR THE
                                                       PERIOD FROM  PERIOD FROM
                                                         JANUARY 1    JANUARY 1
        IN THOUSANDS OF DOLLARS EXCEPT THE NUMBER       TO APRIL 3  TO MARCH 28
         OF UNITS AND PER UNIT DATA                     (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Revenues                                         $ 125,961     $ 97,431
    
        Less: Subconsultants and other direct expenses    $ 18,149     $ 12,627
    
        Net revenues                                     $ 107,812     $ 84,804
    
        Direct project costs                              $ 55,530     $ 42,394
        -------------------------------------------------------------------------
        Gross margin                                      $ 52,282     $ 42,410
    
        Marketing, general, and administrative
         expenses and others                              $ 33,754     $ 25,685
        -------------------------------------------------------------------------
        EBITDA                                            $ 18,528     $ 16,725
        -------------------------------------------------------------------------
        Interest                                             $ 261        $ 319
    
        Depreciation of property, plant and equipment      $ 1,510      $ 1,398
    
        Amortization of intangible assets                  $ 4,732      $ 4,143
        -------------------------------------------------------------------------
        Earnings before income taxes  and
         non-controlling interest                         $ 12,025     $ 10,865
    
        Income taxes                                         $ 999        $ 447
        -------------------------------------------------------------------------
        Earnings before non-controlling interest          $ 11,026     $ 10,418
    
        Non-controlling interest                           $ 3,677      $ 4,014
        -------------------------------------------------------------------------
        Net earnings                                       $ 7,349      $ 6,404
    
        Basic net earnings per unit                         $ 0.41       $ 0.45
    
        Weighted average number of units                18,103,589   14,277,078
    
        Diluted net earnings per unit                       $ 0.41       $ 0.45
    
        Diluted weighted average number of units        27,163,976   23,345,696
        -------------------------------------------------------------------------
    
    
    
        DISTRIBUTABLE CASH
    
                                                     ----------------------------
                                                             First quarter
                                                     ----------------------------
                                                              2010         2009
                                                     ----------------------------
                                                           FOR THE      FOR THE
                                                       PERIOD FROM  PERIOD FROM
                                                         JANUARY 1    JANUARY 1
                                                        TO APRIL 3  TO MARCH 28
        IN THOUSANDS OF DOLLARS EXCEPT PER UNIT DATA    (UNAUDITED)  (UNAUDITED)
        -------------------------------------------------------------------------
        Cash flows from operating activities              $ 16,200     $ 13,050
    
        Capital expenditures paid                         ($ 4,450)    ($ 3,546)
    
        Standardized distributable cash                   $ 11,750      $ 9,504
    
        Change in non-cash working capital items(1)        $ 1,202      $ 2,621
    
        Capital expenditures paid for UNISON project(2)    $ 1,072            -
    
        Adjusted distributable cash                       $ 14,024     $ 12,125
    
        Adjusted distributable cash, per unit(3)            $ 0.52       $ 0.52
    
        Payout ratio
    
          Standardized                                        86.7%        92.2%
          Adjusted                                            72.6%        72.2%
        -------------------------------------------------------------------------
        Distributions
    
        Fund's units distributions declared                $ 6,789      $ 5,360
    
        Class B Exchangeable LP Unit distributions
         declared                                          $ 1,623      $ 1,623
    
        Class C Exchangeable LP Unit distributions
         declared                                          $ 1,774      $ 1,775
    
        Distributions declared, all units                 $ 10,186      $ 8,758
    
        Distributions declared, all units, per unit(4)      $ 0.38       $ 0.38
        -------------------------------------------------------------------------
        (1) Distributions are based on actual historical and estimated future
            performance of the Fund on a full-year basis. Consequently, periodic
            fluctuations in non-cash working capital are not considered when
            evaluating the cash flows available for distribution.
    
        (2) The Fund is working towards the implementation of a new information
            management system called the UNISON project. Costs incurred for this
            project are non-recurrent and therefore are removed from the
            calculation of the Adjusted distributable cash.
    
        (3) Distributable cash per unit is calculated using the diluted weighted
            average number of units.
    
        (4) Distributions declared per unit represent the monthly distributions
            declared. Distributions declared per unit, calculated using the
            diluted weighted average number of units, were $0.38 per unit for the
            period.

    NON-GAAP MEASURES

    The Fund uses Non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures which are not recognized under GAAP and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable. The Fund believes these measures are useful supplemental measures that may assist investors in assessing an investment in units.

    Non-GAAP measures used by the Fund are Net revenues, EBITDA, Distributable cash, and Payout ratio.

    Net revenues

    Net revenues are defined as revenues from consulting services less direct costs for subconsultants and other direct expenses that are recoverable directly from the clients. Net revenues are not a measure in accordance with GAAP and do not have standardized meaning prescribed by GAAP. Therefore, net revenues may not be comparable to similar measures presented by other issuers. Investors are cautioned that net revenues should not be construed as an alternative to revenues for the period (as determined in accordance with GAAP), as an indicator of the Fund's performance.

    EBITDA

    EBITDA is defined as earnings before interest, tax, depreciation and amortization. EBITDA is not an earnings measure in accordance with GAAP and does not have a standardized meaning prescribed by GAAP. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings for the period (as determined in accordance with GAAP) as an indicator of the Fund's performance, or as an alternative to cash flows from operating, financing and investing activities as a measure of the Fund's liquidity and cash flows. The Fund's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, the Fund's EBITDA may not be comparable to similar measures used by other issuers.

    Distributable cash

    The Fund views distributable cash as an operating performance measure and it is a non-GAAP measure generally used by Canadian income funds as an indicator of financial performance.

    Distributable cash is calculated in accordance with the recommendations provided in CICA's publication "Standardized Distributable Cash in Income Trusts and Other Flow-Through Entities." Standardized distributable cash is defined as cash flows from operating activities as reported in the GAAP financial statements, including the effects of changes in non-cash working capital items and any operating cash flows provided from or used in discontinued operations, less adjustments for:

    (a) total capital expenditures as reported in the GAAP financial
            statements; and
        (b) restrictions on distributions arising from compliance with financial
            covenants restrictive at the date of the calculation of standardized
            distributable cash and limitations arising from the existence of a
            minority interest in a subsidiary.

    The Fund also calculated an adjusted distributable cash, which is defined as standardized distributable cash adjusted for entity-specific adjustment items that management believes are appropriate for the determination of levels of distributions.

    Payout ratio

    Standardized payout ratio is defined as aggregate cash distributions declared divided by standardized distributable cash. Adjusted payout ratio is defined as aggregate cash distributions declared divided by adjusted distributable cash.

    Pierre Shoiry, President and CEO, GENIVAR Income Fund, (514) 340-0046, ext. 5104; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, (514) 340-0046, ext. 5184